2026-08-22 22:02:05
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Over 300,000 subscribers turn to us for business and investment insights.
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📊 Monthly reports: 200+ companies visualized.
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📩 Saturday PRO reports: Timely insights on the latest earnings.
Today at a glance:
🛒 Walmart: Digital Outruns Stores
⚙️ Analog Devices: Grid-to-Chip Breakout
🎮 NetEase: Evergreen Games Deliver
🎯 Target: Traffic Holds Up
⛷️ Amer Sports: Wilson Joins In
💳 Klarna: GMV Reset
Walmart Q2 FY27 revenue rose 6% Y/Y to $187.9 billion ($1.1 billion beat), with adjusted EPS of $0.81 ($0.07 beat). Walmart US comps slowed to 2.6%, the weakest growth in more than six years and below the 3.7% consensus, sending shares sharply lower. Transactions still grew 1.5%.
The headline slowdown is somewhat misleading. New federal drug-pricing rules created a roughly 125 bps drag on US comps. Excluding Health & Wellness, comps grew 3.4%. Walmart also used some of its tariff refunds to cut prices on more than 11,000 items. The company continues gaining share, particularly in grocery and among higher-income households.
Meanwhile, the businesses increasingly driving Walmart’s economics remain much stronger than store sales:
Global e-commerce grew 23%.
Advertising surged 38%.
Membership fee revenue increased 17%.
Walmart US e-commerce has now grown above 20% for 10 consecutive quarters, with profitability improving as stores increasingly function as fulfillment hubs rather than simply physical retail locations.
Fuel remains a challenge, with FY27 incremental fuel costs now expected above $2 billion. Walmart is also expected to continue reinvesting tariff refunds into lower prices, contributing to Q3 adjusted EPS guidance of $0.62–$0.64, which is below consensus.
Despite that reinvestment, Walmart raised FY27 sales growth guidance to 4%–5% (from 3.5%–4.5%) and adjusted operating income growth to 7%–8.5% (from 6%–8%).
Bottom Line: Slower US comp reflects pharmacy pricing rather than lost share. The more important shift continues underneath, with e-commerce, advertising, membership, and marketplace growing far faster than traditional stores. Walmart increasingly looks less like a retailer with digital businesses attached and more like an omnichannel platform funded by retail.
2026-08-21 20:00:57
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Revenue rose 9% Y/Y to $39.6 billion, while Cloud accelerated to 45% growth, its fastest pace in more than five years. AI-related product revenue grew triple digits for the 12th consecutive quarter, and Cloud adjusted EBITA more than doubled as margins expanded.
The trade-off remains expensive (a familiar theme across Big Tech this earnings season). Alibaba spent almost $10 billion on CapEx during the quarter, up 75% Y/Y, while free cash flow was a $6.6 billion outflow. Adjusted EBITA also fell by 30% as the company continued to invest in AI infrastructure, models, and applications.
This quarter offered the clearest glimpse of the potential return on these AI investments, and management put a three-year payback timeline on its compute buildout.
Revenue breakdown:
🛒 China E-commerce: $16.3 billion, down 8%.
🛵 Quick Commerce: $7.9 billion, up 45%.
🌍 International Commerce: $6.1 billion, up 1%.
☁️ AI Cloud & Compute: $7.1 billion, up 45%.
🤖 AI Apps & Others: $4.9 billion, up 3%.
Alibaba overhauled its reporting segments this quarter. Quick Commerce now stands apart from legacy China e-commerce, while Alibaba Cloud absorbed the T-Head chip division.
The 8% Y/Y decline in China E-commerce reflected weaker marketplace activity and Alibaba’s continued pullback from some direct-sales businesses.
Overall revenue rose 9% Y/Y, but it came with another step down in profitability. Operating margin fell to 6% from 14% a year ago, while adjusted EBITA declined 30% to $4.0 billion as Alibaba kept investing across AI and commerce.
Alibaba is getting faster growth from the businesses it is funding most aggressively, but the cost of building them remains visible across margins and cash flow. The company is maintaining its 380 billion yuan (~$56 billion) three-year AI investment plan.
Alibaba Cloud delivered its strongest growth in more than five years, with revenue rising 45% Y/Y to $7.1 billion. AI-related products now account for roughly 35% of external Cloud revenue, up from 30% last quarter.
The acceleration is finally driving operating leverage. Cloud adjusted EBITA jumped 133% Y/Y to $830 million, expanding segment margins to roughly 12%, a notable milestone given how aggressively capacity is scaling.
Management says demand for AI compute still exceeds supply, which explains much of the current spending cycle. This quarter’s $10 billion in CapEx was primarily allocated to adding cloud infrastructure. AI-related revenue was already running at roughly $7.3 billion annually in the June quarter, with management expecting it to approach a $10 billion run rate this quarter.
The key question is how quickly those infrastructure investments can recoup their costs. Alibaba estimates that AI compute assets can currently reach breakeven in roughly three years, comfortably within their expected useful life. Management believes the payback period could eventually fall toward 2.5 years as utilization rises, Cloud margins improve, and more workloads shift toward Alibaba’s own chips.
That framework helps explain why Alibaba is comfortable sacrificing free cash flow today. If Cloud can sustain 40%+ growth while gradually improving margins, the current CapEx ramp can support a much larger recurring revenue base rather than becoming a permanent drag on returns.
Alibaba’s advantage is that it does not have to monetize AI through one product.
It owns increasingly large pieces of the stack:
Silicon: T-Head (in-house Zhenwu chips).
Compute: Alibaba Cloud.
Foundation models: Qwen (open-weight ecosystem).
Applications: QwenWork, enterprise agents, and consumer assistants.
Owning more of that stack should help the economics over time. T-Head’s Zhenwu chips already serve more than 650 external customers across 20+ industries via Alibaba Cloud. As more workloads move onto Alibaba-designed silicon, the company can reduce its reliance on expensive third-party accelerators and potentially capture more of the margin generated by AI demand.
Qwen provides another distribution advantage. The model family has surpassed 3 billion downloads, with more than 300,000 derivative models built on top of it. Alibaba can make the models broadly available while monetizing the resulting usage through inference, storage, and other Cloud services. Its Model-as-a-Service business has already surpassed 16 billion yuan (~$2.4 billion) in ARR.
The play is much bigger than selling chatbot subscriptions. Alibaba distributes Qwen to capture developers, converts that open-source adoption into sticky Cloud compute, and deploys custom silicon to protect gross margins. That creates a flywheel across the stack.
Alibaba now breaks out AI Labs & Applications (part of AI Apps and Other in our visual above), giving investors a cleaner view of what model training and front-end apps cost while Cloud scales.
The segment includes Alibaba’s model labs, the consumer Qwen business, and products such as QwenWork.
AI Labs and Applications Revenue reached $0.5 billion, up 16% Y/Y.
Adjusted EBITA loss widened to roughly $2.0 billion, more than four times the year-ago level.
The losses reflect heavy spending on model training, product development, and user acquisition. Alibaba is still competing aggressively for consumer and enterprise adoption, even as much of the underlying technology remains free or inexpensive to access.
Management expects losses to narrow as training becomes more efficient and commercialization expands. For now, though, the economics are very different across the stack. Cloud is already showing operating leverage, while AI applications remain firmly in investment mode.
Quick Commerce revenue surged 45% Y/Y to $7.9 billion, making it larger than Cloud this quarter. The business now includes Taobao Instant Commerce, Freshippo, and Tmall Supermarket’s on-demand operations.
On-demand delivery gives Alibaba a powerful frequency engine. Food delivery drives more frequent usage, while 30-minute delivery for groceries and everyday essentials expands order volume well beyond traditional multi-day marketplace shopping.
The economics are also improving:
Taobao Instant Commerce improved unit economics Q/Q while maintaining market share.
Higher average order values and a better mix of non-food orders helped margins.
Alibaba expects non-food volume to surpass food within the next fiscal year.
Quick Commerce is targeting overall profitability by FY29.
Management believes Quick Commerce could eventually represent around 30% of platform GMV. If that happens, the current spending would have done more than defend Alibaba against Meituan and JD.com. It would have added a much higher-frequency layer to an e-commerce business whose traditional China revenue is already mature.
Alibaba’s AI spending is still crushing free cash flow, but this quarter offered tangible evidence that the investment is creating economic value. Management’s roughly three-year payback estimate on AI compute assets is the most revealing metric.
AI Labs remains deeply loss-making, and Quick Commerce still requires substantial investment. Still, if Cloud sustains 40%+ growth with expanding margins, today’s massive CapEx could look like smart capital allocation. It is broadly the same playbook we are seeing from the US hyperscalers.
Next up: Saturday’s PRO edition, with Walmart, Target, Klarna, and more.
That’s it for today!
Stay healthy and invest on!
Disclosure: I own AMZN, BABA, GOOG, META, MSFT, and SHOP in App Economy Portfolio. I share my ratings (BUY, SELL, or HOLD) with App Economy Portfolio members.
Author's Note (Bertrand here 👋🏼): The views and opinions expressed in this newsletter are solely my own and should not be considered financial advice or any other organization's views.
2026-08-18 20:05:03
Welcome to the Premium edition of How They Make Money.
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Every quarter, funds managing over $100 million must disclose their portfolios, offering a rare glimpse into the minds of elite investors.
The latest 13F filings capture portfolios as of June 30.
In Q2, the AI trade broadened beyond NVIDIA.
The biggest funds kept their core exposure to hyperscalers and leading chipmakers, but new money increasingly moved toward the rest of the AI supply chain. Taiwan Semiconductor, memory, storage, semiconductor equipment, and newer infrastructure names like Cerebras and Nebius featured prominently among top buys.
The theme also continued to spread into the physical economy. Power, industrials, materials, and infrastructure companies continued to attract capital as investors sought ways to participate in the massive data center buildout beyond GPUs.
Beyond AI, some of the quarter’s most interesting bets came from places few investors would expect.
Against that backdrop, super investors had to choose between doubling down on AI infrastructure, revisiting beaten-down growth stocks, or sticking with durable compounders.
Let’s see where the smart money leaned.
Today at a glance:
Hedge funds’ strategies
Top buys and top holdings in Q2
Fund picks that were not on your bingo card
Implications for individual investors
Before we dive into 13Fs, a quick reminder: blindly copying hedge fund trades is a terrible strategy.
Investing is like shooting 3-pointers. Even Steph Curry, the greatest shooter ever, misses more than half the time. There are no guaranteed outcomes, even for the pros.
Your behavior matters more than your portfolio. As Peter Lynch said, “Know what you own and why you own it.”
Conviction is what helps you hold through volatility. And conviction comes from doing your own work, not borrowing someone else’s.
As Ian Cassel puts it:
“You can borrow someone else’s stock ideas but you can’t borrow their conviction. […] Do the work so you know when to sell. Do the work so you can hold. Do the work so you can stand alone.”
Some limitations of 13F filings:
Omit short positions and cash reserves.
Offer a partial view, leaving out smaller funds.
Exclude non-US equities, bonds, and commodities.
Can be dated, given their submission 45 days after the quarter.
With all this said, let’s see what top funds were buying and holding in Q2.
Hedge funds are financial powerhouses known for flexible, aggressive strategies designed to beat the market.
Here’s what typically shapes their moves:
Market conditions: Long in bull markets, defensive in bear markets.
Sector trends: Shifts in regulation or consumer behavior steer capital.
Fundamentals: Strong earnings, free cash flow, and leadership matter.
Macro factors: Rates, inflation, and geopolitics influence positioning.
Quant models: Some lean on proprietary algorithms to find an edge.
Risk management: Diversification, hedging, and position sizing.
Investor sentiment: Fear and greed create mispriced opportunities.
Still, it doesn’t always work out.
The Global X Guru ETF (GURU), designed to track top hedge fund holdings, has underperformed the S&P 500 since its inception in 2012. And that comparison still leaves out the classic hedge fund fee drag.
And those fees matter. The classic “2 and 20” model (2% of assets + 20% of gains) can significantly reduce returns. It's no wonder that many individual investors are opting for simpler, lower-cost strategies.
Our partners at Fiscal.ai gather the data on Super Investors and visualize their portfolio for you. Pick your favorite investors and see how their holdings have evolved.
In early 2020, just before the COVID market turmoil, I curated a list of 20 top-performing hedge funds using TipRanks data. The selection focused on alpha relative to the S&P 500, and I also included a few funds frequently featured in my social feeds and podcast rotation. It’s not perfect, but it remains a solid directional filter.
The 10 stocks below represent nearly half of the top holdings listed:
🤖 AI infrastructure: TSM, NVDA, ASML, AMAT, MU.
☁️ Mega-cap platforms: AMZN, GOOG, META.
🚀 New IPOs: SPCX, CBRS.
Amazon and Taiwan Semiconductor are now tied as the most widely held stocks, appearing among the top five holdings of 9 of the 20 funds. Alphabet follows with eight, while NVIDIA appears in five. Microsoft, once a fixture on this list, appeared only once at the end of June after falling more than 20% YTD.
Apple and Tesla were entirely absent from the top-five holdings.
The holdings themselves don’t change dramatically from quarter to quarter, so let’s turn to the more actionable insights with the new movements in Q2.
2026-08-15 22:02:10
Welcome to the Saturday PRO edition of How They Make Money.
Over 300,000 subscribers turn to us for business and investment insights.
In case you missed it:
📊 Monthly reports: 200+ companies visualized.
📩 Tuesday articles: Exclusive deep dives and insights.
📚 Access to our archive: Hundreds of business breakdowns.
📩 Saturday PRO reports: Timely insights on the latest earnings.
Today at a glance:
🦎 Berkshire: Cash Starts Moving
📱 Tencent: AI Bill Arrives
🌐 Cisco: Networking Supercycle
⚙️ Applied Materials: Tool Bottleneck
🌊 Sea Limited: Shopee Monetizes
🏦 Nubank: Credit Fears Ease
🚚 JD.com: Profit Inflects
💳 Adyen: Platform Broadens
👟 On: Premium Focus
💊 Hims & Hers: GLP-1 Trade-off
🛍️ Global-e: Managed Markets Scales
📆 Monday.com: AI Mix Jumps
🇧🇷 StoneCo: Credit Risk Rises
🌎 DLocal: Volume Eats Take Rate
Berkshire Hathaway Q2 revenue rose 10% Y/Y to $101.8 billion, while operating profit before tax reached $14.4 billion.
Manufacturing was the standout, with revenue up 13% and profit rising 24%.
Insurance was softer, with underwriting profit down 13% and GEICO underwriting earnings falling 45%.
The bigger story is the capital allocation under new CEO Greg Abel. Berkshire bought $23 billion of stocks while selling just $3 billion, its first quarter as a net buyer of stocks in more than three years. That included roughly $10 billion of Alphabet. Berkshire also repurchased $4.5 billion of its own stock in Q2, followed by an estimated $3.4 billion more in July.
As a result, the cash pile fell to $365.5 billion from roughly $397 billion in Q1. That is still enormous, but the direction has changed. Berkshire is also deploying capital through acquisitions, including the $6.8 billion purchase of homebuilder Taylor Morrison.
Bottom Line: The Abel era is starting to look different. Berkshire remains extraordinarily liquid, but buybacks, equity purchases, and acquisitions are finally putting meaningful chunks of its cash pile to work. The question is no longer when Berkshire will deploy capital. It is whether Abel can earn Buffett-like returns on it.
2026-08-14 20:03:46
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There is more demand for compute than the biggest cloud companies can supply.
That gap has fueled the rise of neoclouds, specialized providers built around AI infrastructure. They focus on securing raw power, specialized data-center capacity, and accelerator clusters rather than replicating the broad software ecosystems of AWS, Azure, or Google Cloud.
Three distinct neocloud models reported this week, offering a clear view into how different strategies tackle this compute bottleneck:
CoreWeave: Pure-play NVIDIA GPU fleet rental scaling on long-term enterprise commitments.
Nebius: An AI-focused cloud platform built from scratch on international data-center infrastructure.
Cerebras: A proprietary chipmaker pivoting into cloud-hosted fast inference.
The economics across all three are counterintuitive. Capacity must be funded and built months before it can generate revenue, driving negative free cash flow. Debt, leases, depreciation, and customer concentration matter almost as much as growth.
Let’s review what we learned.
CoreWeave is the purest version of the neocloud model. It buys NVIDIA GPUs, installs them in data centers, and rents the compute to customers such as OpenAI, Microsoft, and Meta.
Most of the business is already spoken for. Committed contracts generated 98% of Q2 revenue, while on-demand usage contributed just 2%.
Revenue jumped 112% Y/Y to $2.6 billion, but gross margin contracted by 8 points to 66% as data-center rent, power, and other ramp costs grew even faster.
CoreWeave posted a $49 million operating loss and a $626 million net loss, heavily weighed down by $640 million in interest expense tied directly to its GPU-collateralized debt facilities.
And the income statement captures only part of the spending. Q2 CapEx reached $9.4 billion, more than three times quarterly revenue.
📚 Demand keeps outrunning capacity: Backlog reached $104 billion, up 246% Y/Y, before another $25 billion of customer commitments signed in early Q3. Near-term capacity is effectively sold out.
💰 Margins are expected to turn: Gross margin contracted as CoreWeave raced to bring new capacity online, but adjusted operating margin improved sequentially from 1% to 5%. New Q2 contracts are expected to carry contribution margins 5 to 10 points above recent deals, even before July’s roughly 25% price increase.
🧠 The mix is getting better: Storage, CPU, networking, and software now exceed $400 million of ARR. Managed inference jumped from $1 million to more than $100 million of booked ARR in a single quarter.
🏗️ Growth remains extremely expensive: CoreWeave raised its 2026 CapEx outlook to $35 billion to $39 billion as it races toward more than 1.85 GW of active power by year-end.
Bottom line: CoreWeave’s $104 billion backlog sounds almost absurd next to a targeted 2026 exit revenue run rate of $19 billion. But conversion is constrained by physical capacity. The investment case comes down to how quickly it can turn power and GPUs into revenue without letting financing costs overwhelm the margin gains.
Nebius did not start as a typical AI infrastructure startup.
🇷🇺 Yandex roots: Nebius emerged from the 2024 breakup of Russian tech giant Yandex. Its Nasdaq-listed Dutch holding company sold the Russian operations for $5.4 billion and kept a smaller group of international businesses that became Nebius.
♻️ Public-company reset: The remaining company kept its Nasdaq listing, rebranded as Nebius Group, and put Yandex co-founder Arkady Volozh back in charge.
☁️ AI infrastructure pivot: Rather than rebuild the old internet conglomerate, Nebius used its engineering talent, cloud expertise, and capital base to build a purpose-built AI cloud.
AI Cloud generated $575 million, or 98% of Q2 revenue, by renting GPU capacity through its own cloud platform.
Revenue surged 454% Y/Y to $582 million, while gross margin expanded 6 points to 77%. The business also generated $236 million of adjusted EBITDA at a 41% margin.
Nebius posted a $176 million operating loss, but depreciation and amortization alone reached $260 million as billions of dollars of new infrastructure started hitting the income statement.
💰 Pricing is moving higher: Four new AI cloud deals averaged more than $1 billion of contract value and $20 million to $25 million per megawatt. Shorter-term capacity is now fetching as much as $40 million to $50 million per MW.
⏱️ Payback is getting faster: Management estimates the Q2 contracts will repay their associated CapEx and operating costs in about 22 months, down from the previous two-to-three-year range.
🏗️ The buildout is enormous: Q2 CapEx reached $5.7 billion, almost 10 times quarterly revenue. Nebius still expects $20 billion to $25 billion for the year.
🤝 Customers are helping finance it: Nebius expects more than $9 billion of customer prepayments in 2026, covering roughly 50% to 60% of the associated CapEx.
Bottom line: Nebius is spending at extraordinary scale, but rising prices, faster paybacks, and customer prepayments are making each new megawatt more attractive. That capital efficiency may ultimately matter more than its 454% revenue growth.
Cerebras is the odd one out among neoclouds. Instead of buying NVIDIA GPUs, it designs its own wafer-scale processor and monetizes it either by selling systems or renting the compute through Cerebras Cloud.
The revenue mix is shifting quickly. Q2 revenue rose 74% Y/Y to $180 million, with Cloud & Other Services surging 281% to $126 million while hardware fell 23% to $54 million.
The company had a brutal $477 million operating loss, but the headline needs context. Cerebras went public in May, triggering substantial stock-based compensation. Its core operating loss was just $34 million, compared with $477 million under GAAP.
Core results exclude stock comp, customer-warrant charges, and certain pass-through items. This stock-based compensation overhang should normalize over upcoming quarters as initial post-IPO equity grants settle.
Reported gross margin was just 14%, but on a core basis it was 41%, up about 9 points Y/Y. That was down from 46.5% in Q1, partly because Cerebras is temporarily paying to rent back systems it previously sold so it can meet cloud demand.
☁️ Cloud has become the growth engine. Core cloud revenue nearly quadrupled to $128 million and surpassed hardware for the first time.
📈 The outlook improved. Cerebras raised FY26 core revenue guidance to $880 million to $890 million, alongside higher gross-margin and operating-margin expectations.
🏗️ Capacity is still the bottleneck. More than 600 MW of data-center capacity is now live or contracted through 2027. Core gross margin is expected to bottom in Q3 before new capacity comes online and reduces the need for expensive rented capacity.
📚 Demand is far ahead of revenue. Remaining performance obligations reached $25.4 billion. OpenAI remains a major customer, but converting that backlog requires substantially more infrastructure.
Bottom line: Cerebras is evolving from a chip seller into a fast-inference cloud. Stock comp and other accounting adjustments obscure that progress, but the real test is converting its enormous backlog into revenue while rebuilding margins as new capacity comes online.
Across all three neoclouds, the same tension keeps showing up. Demand is outpacing available compute, but serving it requires enormous amounts of capital before revenue arrives.
That same compute shortage is pushing tech giants to build their own capacity. Meta is scaling custom silicon and gigawatts of GPUs, while SpaceX has already started selling access to its Colossus cluster. The longer-term question is whether neoclouds remain essential infrastructure partners or temporary relief valves once mega-cap AI capacity fully comes online.
The next phase comes down to capacity, margins, and funding. Neoclouds need to turn contracted demand into energized infrastructure, improve returns as utilization rises, and fund the next wave of expansion without letting debt or dilution overwhelm the economics.
The demand is locked in. Capital efficiency will separate the winners.
Next up: Saturday’s PRO edition will include the other big earnings of the week, like Berkshire, Tencent, Cisco, Sea Limited, Nu, Adyen, and more.
That’s it for today!
Stay healthy and invest on!
Thanks to Fiscal.ai for being our official data partner. Create your own charts and pull key metrics from 50,000+ companies directly on Fiscal.ai. Start an account for free and save 15% on paid plans with this link.
Disclosure: I am long AMZN, MSFT, GOOG, NVDA, AMD, TSM, and ASML in App Economy Portfolio. I share my ratings (BUY, SELL, or HOLD) with members.
Author's Note (Bertrand here 👋🏼): The views and opinions expressed in this newsletter are solely my own and should not be considered financial advice or any other organization's views.
2026-08-11 20:01:19
Welcome to the Premium edition of How They Make Money.
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For years, media companies treated streaming like a land grab. That era is ending.
Streaming is starting to look like a mature business. Disney reached a 13% streaming margin, Paramount hit 15%, and Warner Bros. came in at nearly 17%. Subscriber totals matter less than churn, pricing, engagement, and how much profit each viewer can generate.
Meanwhile, the businesses streaming is replacing keep shrinking. Warner’s Networks revenue fell 17%. Paramount’s TV Media declined 9%. Cord-cutting and weaker advertising continue to eat away at linear TV.
Paramount’s Warner Bros. deal has cleared most international regulators, but a US antitrust fight has pushed the timeline into 2027. The longer it drags, the more expensive the deal becomes.
Can streaming profits grow fast enough to outrun the decline of the old bundle? And how expensive could the merger delay become?
Today at a glance:
🏰 Disney: Parks Answer the Doubters
🎥 Warner: Box Office Whiplash
⛰️ Paramount: Stronger Before the Storm
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Disney’s fiscal year ends in September, so the June quarter was Q3 FY26.
📸 Big picture: Revenue rose +7% Y/Y to $25.2 billion ($0.2 billion miss), while adjusted EPS jumped +28% to $2.06 ($0.21 beat). Total segment operating income rose +21% to $5.6 billion, ahead of expectations. Disney maintained its FY26 outlook for ~12% adjusted EPS growth and raised its buyback target again to at least $9 billion.
📈 Streaming margin expands again: Disney+/Hulu revenue grew +11% to $5.5 billion, while SVOD operating margin reached 13%, extending last quarter’s profitability inflection. Disney remains on track for double-digit streaming margins in FY26, though management says international monetization still has room to improve.
🍿 Entertainment gets its hit: Entertainment operating income surged +64% Y/Y, helped by streaming profitability and Toy Story 5, which crossed $1 billion at the global box office. The film also lifted merchandise sales and Disney+ engagement, showing how a successful franchise can reverberate across the company.
🏰 Experiences answer the skeptics: Experiences revenue rose +10% to a record $10.0 billion, while operating income jumped +20% to $3.0 billion. Domestic park attendance grew +3%, and per-guest spending rose +4%, with Walt Disney World having a particularly strong quarter. International visitation remains soft, but forward bookings are healthy.
🏈 Sports remains the weak spot: Sports revenue reached roughly $4.5 billion, while operating income fell -17% to $858 million, hurt by shorter NBA playoff series and rights timing. ESPN remains the clearest drag on Disney’s otherwise improving profit mix.
🤖 Disney+ gets a roadmap: CEO Josh D’Amaro said Disney will begin expanding Disney+ beyond video in spring 2027, adding games, merchandise, and other experiences designed to lower churn and increase lifetime fan value. Disney is also considering free ad-supported offerings as it turns Disney+ into the company’s broader digital hub.
Bottom Line: Streaming profitability is becoming repeatable, while Experiences just delivered the quarter investors feared it couldn’t. That gives D’Amaro more room to execute his “One Disney” strategy, with Disney+ increasingly positioned as the front door to content, commerce, and experiences.